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Managing Marketing: The Challenges of Managing a Modern Media Agency

Fiona_Johnston

Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

Fiona Johnston is the CEO of media agency UM Australia. She was also the CEO Magazine CEO of the Year 2019 Runner up, a qualified and experienced executive coach and a yoga coach. But since her second job in her career, she has been focused on her belief in working hard, being nice to people, play to win, have fun, and support and grow great talent. It is a belief and purpose that has led to achieving amazing results in everything she does.

You can listen to the podcast here:

Follow Managing Marketing on SoundcloudTuneInStitcher, Spotify and Apple Podcast.

Transcription:

Darren:

Welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media and advertising with industry thought leaders and practitioners. Today I’m sitting down with Fiona Johnston, CEO of media agency UM Australia. Welcome, Fiona.

Fiona:

Hi, Darren, thank you.

Darren:

It’s terrific to have you here. Congratulations on being the runner-up last year in the CEO magazine, CEO of the Year.

Fiona:

Thank you.

Darren:

For someone running a media agency to be that highly acclaimed amongst CEOs is to really special. It’s a tough job, isn’t it?

Fiona:

Absolutely. I’m very proud of it because the runner-up signpost after it is quite amusing. But I’m incredibly proud of it. It was something I was encouraged to do and I’m glad I did because it’s not often that I put myself out into the ether like that. And it’s important for all of us; it’s evidence for the work of the team, that you can put a case together to show what it’s like to lead that team.

Darren:

And for media agencies especially to be able to build high performing teams and to hold them together is a significant challenge compared to some other businesses.

Fiona:

Absolutely. It’s very dynamic; it changes and we’re one of the most professional and emotional industries I know. So that creates a tension in how you manage the business.

Darren:

It’s interesting you say that because a lot of people would view the creative and media side and say creative is more the emotional creative side and media is more about numbers but it’s not true. Creativity exists equally in both.

Fiona:

Absolutely and having run both I think there’s still that lovely tension where creative agencies have more of that emotional glue but I see that in every single media agency or company I’ve ever been a part of. I guess it expresses in different ways.

I think media companies are incredibly passionate about doing things the right way at the right time. And creative agencies are similar but absolutely the content, output, and product. Both crafts are equally emotive if you care about what you do. I’ve definitely made it a purpose of being somewhere where we care about what we do.

Darren:

I always notice when the industry talks about people (and rightly there’s a real focus on developing people) but one of the issues that comes up is the retention that the industry suffers from. And certainly, it seems from the numbers we get from places like the MFA that media agencies really do have issues around not just attracting but retaining good people. Is that fair to say?

Fiona:

I think it’s definitely fair to say in this market. I’ve been here for more than 12 years now and the talent pool has always been a challenge—both the size of it and the training. You start with that basis. It’s also a long way from anywhere so it’s hard to attract different types of talent, which is very important.

I like to have a bunch of people from all walks of life and all parts of the world. And then you layer that with quite an emotive state of business, which then performs in a way that’s very responsive to client’s needs which are very changeable. And so you end up with a very dynamic workforce that cares about what it does.

Therefore we can at times be at the strain of changing client needs which is great because we are responsive but equally challenging when you can’t get the cadence of the business to run around that changing need. That’s something that I’m working on at the moment.

So there are all those market components in place. I also think we haven’t been great historically at putting proper L&D budgets into businesses. It’s something I’ve always been very passionate about and continue to be, hence why we’ve put in a Head of Wellbeing.

People say it’s a young industry and that’s also why there is such churn because you can’t really grow up or old in our industry; you eventually have to get out of it. But I’d like to think that’s not the case; there are so many brilliant people in their middle or later years who can apply a lot of really critical perspective to what we do and how we do it.

Churn is higher than I’d like it to be for a number of reasons. Ours is lower than average, every agency says that, but ours is lower than average. And I think part of that is the nature of the beast. We could always invest more in people. I’d love to invest more in people.

Darren:

In some ways, it’s lip service when everyone says ‘it’s a people business’—often talking about marketing and advertising. Yet it’s also one that can be incredibly harsh on people. I see too many situations where there is a large intake of graduates and then it’s like a Darwinian natural selection as to who rises up because the structures of almost every agency have become incredibly flat with very few positions at the top for those that make it.

Fiona:

This is why I think the whole model has to change in some shape or form because that will allow different hubs of excellence in different paths into the business—a professional services business rather than that sort of pyramid. That would definitely make it easier to manage longevity. I want people to come into UM and have the best careers they could possibly have. I hope that’s for a very long time.

We’ve got some very long service people in our business (up to 20 years).

Darren:

Unheard of—long service leave in a media agency. They might think that puts a target on their back.

Fiona:

No.

Darren:

Unfunded liability.

Fiona:

They are critical to our culture and our product. But there is an opportunity within the business to change the model of how we do it so it can be fatter. But also to have healthier relationships with some client bases around how we work in partnership.

I still think there is a hangover within the agency and client relationship that is supply and demand versus partner. We’ve fought very hard for our good luck; it’s not good luck, it’s hard work. We’ve got brilliant client partners where we do have a healthy partnership in the majority of the cases. But I have been in places where it’s just not the case.

Jump this high and at this price—we can’t survive like that. And our clients wouldn’t want us to devalue our people or our product like that. So that dynamic needs a little fixing up as well.

Darren:

We’ve been tracking this since 2007 that media agency fees, inflation-adjusted, have actually decreased. We have an SMU, rather than an FTE—an FTE could be a senior or a junior person. An MSMU is a bundle of resources so it becomes a more standardised point.

We’ve found that the value of one of these MSMUs has actually decreased by over 70% since 2007. This is the downward pressure on the industry. So if a model was based on servitude, i.e. servicing the client, the marketers have enjoyed in the last 13 years a significant drop in the cost of those services at the same time the complexity of the media has gone up exponentially where the demands on the media agency have also gone up significantly. It just doesn’t seem sustainable.

Fiona:

Yes, I think it comes back to a deep sense of pride or purpose or lack of in the value we actually offer. The communications industry, media and creative are both vital in supporting communications and the economy. But because we’ve allowed this mentality to continue for so long it’s etched away at a devalued sense of purpose and pride in people in the industry.

An example of that is overwork and double working and triple working on things that you’re not paid to do. Obviously out of scope is an issue but devaluing the product of what we do. We’ve done consulting for some pretty big businesses and a lot of the intelligence my team offer is absolutely up there, in some ways more relevant than some of the professional service offerings and yet we don’t charge anywhere near as much as that.

We charge for time, not thinking. We charge for things and people, not outputs. Because of that there is this constant nudge and push—how much more can we get out of these agencies versus valuing the product which is very carefully crafted and incredibly well-meaning.

Why would you give your ideas away or work for free, which comes down to pride and purpose in an industry which has forgotten how to have confidence.

Darren:

A lot of procurement people say to me, well if that’s the case why do the agencies accept to do it for less and less? And I say you’ve also got to understand that it’s a highly competitive market. And if the price becomes the difference between winning or losing then it’s very hard for an agency to pass on price, especially if you’re part of a holding company.

An independent is probably more likely to make that decision because it’s their business but if you’re in a hierarchical structure where you’re responsible for hitting certain numbers; to be able to say we’re going to pass on this because it’s not right for us, you then have to answer up the chain because it has an impact on share prices and all sorts of things.

Fiona:

Yeah, but you have to make those calls. And they’re not easy calls to make and they require strong business cases. We’ve made those calls, a couple of scenarios where we’ve qualified thoroughly and had to walk away even before we got into the process or pitching because you’ve got to run a bunch of people like a business otherwise you have no business or people.

And if we sign up for something we can’t actually fulfill then it’s detrimental to the business and the group anyway. It’s taken some good healthy debate. It’s been tested by people in the business but we’ve made the decision not to do a couple of things.

Darren:

You seem to have always had a very strong people focus. This must have been one of your first jobs.

Fiona:

Second job.

Darren:

At Euro RSCG KLP Havis Group and you were the youngest director and there’s a quote here, ‘work hard and be nice to people. Win and have fun. Support and grow great talent.’ So, your second job you were already focusing on things around being nice to people, growing and supporting talent. You already had a very strong people focus as a management style. Where did that come from?

Fiona:

Probably my first boss. Most of my bosses have been awesome. A couple have been a bit weird. But my first two bosses have been instrumental. The first one was a very strong female, very smart, and always a level of authenticity and care about her practice. She was not a pushover; she was strong, determined but also incredibly caring.

The same for my second boss—he was awesome. UI responded to their way of managing and leading. My team will tell you I’m not necessarily easy, I’m not a pushover but I really do care about the people in our business.

I want them to have their best career years at UM and to look back and go ‘that was a brilliant few years, I learned so much, did things I would never do, I was out of my comfort zone but felt supported. I think that’s what grows you as an individual. So proof in those first two bosses and a bit of family influence maybe.

Darren:

That was a creative role–you were creative agency then and your next job was at Publicis Triangle, which was creative as well.

Fiona:

Yes.

Darren:

And then you got into executive coaching. What brought that about? Was that an extension of that same philosophy?

Fiona:

At the time I was looking to go back to London for a few reasons and in the interim, there were a few people that we both know in our industry and they asked me to consult back to them now that you’re not the competition. It would be great if you come and help fix up X, Y, Z.

So I thought I’d do it for a few months and see how it goes while I’m planning out the London thing that was going on at the time. There were a lot of executive coaches talking with CEOs and the like and helping restructure businesses. And they were doing it by word of mouth and experience but I felt there needed to be for my own authenticity a level of new experience and development within that.

So I went and studied for a couple of years—a Masters level of executive coaching, which had elements of psychology in it and all sorts of stuff. And I’m really pleased I did because being a coach is really different from being a business leader. Where you’ve developed potentially a lot of your success on jumping in, doing things, making decisions; coaching is the opposite.

Hold silence, hold space, don’t own the answer, don’t jump in and that was a really interesting challenge for me personally. And I met some amazing people I worked with; Kofola, eBay, Eofal and a few of the networks at the time as well and did some really interesting great work with some very senior experienced people.

And it reminded me how great people are. I think there was only one person in that whole period of time who had any ill will. Even if they were outright tyrant leaders on the outside they were all genuinely trying to do the right thing but just needed a space to consider that thing. It ended up being a very successful business.

Darren:

Do you think there are things, training as a coach, and practicing those skills that make you a better manager or leader?

Fiona:

I would hope so. I’m probably less directive than I used to be. I listen more than I used to. And even if things get really tough I have an innate sense that people are coming from the best place they can come from. I don’t think there are many purely malicious people in our industry.

Darren:

It’s a weird conversation for me to have with clients when they’re talking about their agencies. I always get to see the worst. It’s like being in marriage guidance, a therapy where they come and complain about their agency. And at some point, I say, ‘you do realise that people don’t come to work at the agency to do a bad job, to screw up or to upset you. They actually turn up each day wanting to do a fabulous job so you’ve got to remember that.’

Things go wrong but things go wrong naturally and you also have to ask yourself how often and what level of contribution you’re making to that. There are certain marketers in the industry that are known for going through agency after agency. It’s like the man who has been married 5 times who says he could never find the right partner. Well, maybe they need to look at themselves before they go and find another agency.

Fiona:

Yeah, 1 and 1 equals 3. Whether you like or don’t like someone or a situation you’re in relation and that relation 3rd space is formed out of one person and another personal party so everyone has to take a level of responsibility for making sure it’s the best relationship it can be. I think that’s important to remember in our business.

It is busy, people get stressed, it doesn’t necessarily mean that’s the intention of that relationship and it’s up to all of us to make it easy and fun as well.

Darren:

You then went from coaching to being chief marketing officer and business development at MediaCom. At the time it was a bit of a heyday for MediaCom, wasn’t it?

Fiona:

Yes, we worked very hard, it was a great bunch of people. I was initially brought in by Toby in my consulting coaching role and then ended up working with him fulltime. We had a few years of completely resetting the whole business. It was hard work, it was good work. It was a good team, we worked really well together and when I left there it was a very different structure to the one I’d joined and helped co-create.

I’m super proud of what it was at the time and still have a lot of friends there and it was very sad to see how that went down. But I think they’re recovering.

Darren:

You left there about 9 months before we had all that news about the clients finding poor performance or behaviour around reporting. I want to go back a step because in that role, as someone who is responsible for growing the business or creating opportunities do you have any thoughts around essential strategies that a media agency should be doing.

Many people in media agencies feel commoditised because at the core of it most people offer very similar services. Then you’ve got the people and how do I communicate that we’ve got a great team other than by interacting with people?

How does that role work as a way of putting you on the map?

Fiona:

That’s the magic sauce, isn’t it? I don’t think it’s rocket science in the sense of some of the practices that have always worked well with humans and businesses are still true. You have to have an authentic purpose. And that’s not a glib tagline on a wall or a few words that sound good in a pitch deck.

You have to have an authentic purpose. When you really believe and understand why you’re doing it and also what you’re not going to do and why then you can create around that a product that is compelling, that people are proud to talk about, and as one of my old CFOs said to me, ‘I’m the best non-sales person ever because I tend to lead things I believe in’.

And when you have a belief that you can help fix something with what you have then it just becomes about relationship development and making sure those things fit together but without that proper purpose—it doesn’t have to be fluffy and navel-gazing and 6 months in the creation—the reason why you’re doing something, everything else just gets a bit fickle.

Darren:

I really like the authentic purpose because too often we hear discussions around brand purpose where it’s been created. It’s almost picked off the wall because that seems to fit well. But you’re talking about the sort of visceral reason that if you went through the agency and asked people why do you work here, what’s the purpose, they would all say the same thing because it’s so much part of the culture of the place.

When you walk in there you get the sense of purpose coming from the very team you were talking about before. Is that fair?

Fiona:

Absolutely. And you have to do it and live it and that’s not easy sometimes. You’ll always get moments where you’re conflicted or challenged around that purpose. Now is a really good example of what we have going on around us in society now—living up to your purpose is critical.

And I’d like to think we are in many ways. There is always more we can do and we should always try and do more otherwise we’re not growing. That role was created to evolve and support the business at the time. And I think we did really well for a number of reasons but I think it was because we had a really good collegiate sense of purpose as a bunch of people and as a business. It wasn’t perfect by any stretch of the imagination.

Darren:

You mentioned MediaCom and that led on to the US in 2015 and there was the K2 report for the A&A about agency rebates. And since then it seems like anybody working in media, the word transparency seems to go on and on. Everyone needs to be more transparent.

And even just a month ago we got another report from ISBA and PWC into the transparency of programmatic where PWC couldn’t find 15% of the money that went in. How much do you think this is still hanging over the industry and how much of it is putting the onus on the agencies to somehow make the whole supply chain transparent?

Fiona:

It’s definitely still hanging around and anything that makes our clients feel there is not a level of visibility and control, which is ultimately what transparency is about, should be looked at, checked and investigated. Within UM we’re audited massively, we have this thread in government, we have a very conscious way of ensuring our clients have visibility and control as much as we possibly can.

Anything that feels Blackbox X should be looked into because there should always be trust. Trust has to be earned and when it’s broken it’s hard. So I think it’s still around a bit, probably less so because a lot of businesses like ours are very adamant about making sure our clients see visibility and control in what we do, how it’s measured, and how we report it and so on.

Darren:

And also the onus seemed to be very heavily on the media agencies. The requirement to be transparent seemed to sit with the media agencies. And one of the things the ISBA PWC report shows is that it’s actually the programmatic supply chain which is often way beyond the agency’s control.

Fiona:

And there’s good and bad in that in the sense that we got a lot of the flak for that situation because they trust us or because they felt that us as the custodians of that entity should be trusted to understand that more. And I think that’s fair to say but we don’t know what we don’t know either.

And some of the tech entities where there is more complexity, then it is harder to understand the ins and outs of this dynamic media because it’s completely different from what we used to do. It’s definitely got better; there is more transparency and visibility.

Our acquisition of Acxiom helps with that in terms of the data we ingest being more ethical and governed than most, which is why we’re super proud of that. That supports our data spine. We’re also having a healthy conversation with Integral Ad Science—this is very recent where we’re trying to see how much further down we can get down the chain of understanding.

Also understanding that there is at some point a level of a dynasty that we just can’t configure out because it’s boxed and algorithms and other stuff but we should understand as much as we can going in with data because then what we get out will be smarter and better.

We have a whole team on this as you could imagine within UM and our chief of data and technology is absolutely razor-focused on this to make sure the data we bring in and build with is of the best quality possible and governed in the best way to ensure that we can see as much we can going through.

So we can edit and optimise as needed or at least make the choice going in as to what we might do or not do as the case may be. Every conversation that we’ve had around that has been open and fine. I think different people in different businesses and companies at different life stages—tech companies are much younger than traditional companies. That doesn’t mean they shouldn’t adhere to certain measurements but it’s a different way of working for a lot of them.

Darren:

In some ways transparency is good from the perspective of having some control, being informed and being able to make informed decisions but sometimes pursuing transparency and losing sight of things like performance is also a problem as well because ultimately a media agency is the custodian of that investment so there is also a requirement to deliver performance.

Fiona:

That’s why we regularly and upfront have a conversation about visibility and control like how much do you want or need? We can share with you as much as we can possibly share with you or give you as much as you need or want to see. Do you want to focus on that or do you want to focus on the outcome of what we’re trying to do in the business and that that performance is supported and trust us to be able to do that?

It’s that place between trust us because we know what we’re doing versus so much detail, visibility, and control that it creates complexity for the clients. Every quarter we QBR around operation and management and obviously every year we do our own review with them as well to make sure that all of these areas are clear as well—what we call the IQ and EQ of what we do. Are you comfortable with the intelligence and craft we’re delivering and how we do that but also the EQ? If you don’t trust why do you not trust?

So, if anything comes up we have these conversations in advance and so far, touch wood, it’s been o.k.

Darren:

There’s a very good TEDx talk about trust, a Harvard professor, and she says there are 3 requirements for trust. The 1st is demonstrating empathy, that I’m actually here for you, not just for myself. The 2nd is to prove knowledge, that I have some knowledge, information, intelligence, capability that you would find necessary or desirable. And the 3rd one is about talk making sense or logic.

But she says you have to be careful about how you interpret that because it’s about talking in a way that the person you’re talking to understands and it makes sense to them. I think sometimes when we look at technology and especially the people working in it, they may be talking something that is logical but they’re not talking to the listening of the person they’re talking to.

So that’s where the break in trust comes because they’re just not talking the same language. So when you mentioned IQ and EQ, getting that balance right but if you’re not actually talking to your client in the way they understand and feel comfortable then you’re really not talking to them.

Fiona:

Yeah, there’s also something that I do which is listening to what’s not said by the clients. Even though they can ask any question they want it’s the era of the data geek and it’s the moment to confuse everybody because it creates power and territory for some people, clients are still sometimes not comfortable asking questions—they think ‘I should know this stuff’.

But even the people who do this stuff don’t know this stuff; it’s constantly changing, it’s dynamic, it depends on what frame you put it into, and how you want to talk about it. And when they don’t then you’re undoing trust without even knowing it. Making sure we pick up what’s not being said is our job as well.

Darren:

It takes me back to something you said much earlier about the need for having sustainable business models so that we can have more senior people throughout agencies. As you get older you in some ways get more secure in who you are that you feel more comfortable asking what most people would say is the dumb question.

Often the dumb question is the question everyone in the room wanted to ask but was too embarrassed or they risked being ashamed so it’s a great way if we can help people feel more comfortable asking those questions.

After you left MediaCom you went back to executive coaching. I love the name of the business—Wild and Safe. That’s a great name. It’s a great juxtaposition.

Fiona:

Yeah, that’s why it was created. It might have been created over a few glasses of wine with some friends but the intent was when you’re in your natural self you’re in your best self. That needs to be a place where you can feel protected so that people have the space they need for those conversations as an executive coach or consultant—a protected safe space.

Nothing was off the table so everything would come up and that was the intention.

Darren:

Then you go back into agency land. I feel like it’s a scene from the Godfather—just as I get out they reel me back in or did you happily go back?

Fiona:

It was a very interesting conversation I had with Danny and Lee at the time. I wasn’t expecting it, there were other things kicking around. I did say if I went back into an agency in this market it would only be UM. I know Baxter really well and I worked with him at Naked—we both worked on Cofola when I first arrived here.

We talked about what was going on, what was needed, about what I would like to do, things I care about, how the team were going and I thought o.k. let’s give it a go.

Darren:

How long ago was that?

Fiona:

Nearly three years.

Darren:

Clearly a good decision because UM seems to be powering along.

Fiona:

We all have our challenges like everybody. We’ve done really well. We’ve worked really hard. We’ve re-crafted what we do and we’re going to continue to re-craft what we do and how we do it, which I’m really excited about. It’s a brilliant bunch of people who care about what they do and are pretty bloody clever as well.

That has its own challenges because they care about what they do, so pulling back on certain things is important as well. I’m very proud of what we’ve achieved. But it’s never done. It changes every single day.

Darren:

I’ve just noticed the time. It’s been fabulous, Fiona. Thanking for making time and having a chat.

Fiona:

Thank you it’s been lovely talking with you.

Darren:

Just one last question before you go. What is the next step for Fiona Johnston?

Ideal for marketers, advertisers, media and commercial communications professionals, Managing Marketing is a podcast hosted by Darren Woolley and special guests. Find all the episodes here

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Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com

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